8. 7. Debate: Considering the Case for New Taxes in Wales

Part of the debate – in the Senedd at 5:46 pm on 4 July 2017.

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Photo of Huw Irranca-Davies Huw Irranca-Davies Labour 5:46, 4 July 2017

Like many others, I thoroughly welcome this debate. I welcome the debate because it’s given us freedom, as an Assembly, to free-range a little bit and to say, ‘Well, we’re not afraid of throwing some of these things out into the open,’ in a way, I have to say, that presaged this with the tax for good. There’s the answer, Mark, that you were looking for. It isn’t a tax just for testing it to see if the circuits run properly and the lights come on; it’s actually the tax is for good, and I think part of this debate is to throw some of those ideas forward as to what it might be, and it could well be the model that Simon has just said there now.

We know what good the plastic bag tax in Wales did, and the massive impact it had on recycling rates and reducing the amount of plastic bags that were going into the waste in the natural environment and so on. So, it might well be a logical extension of that, but there might be other ones to do with social care. That tax is for good is the issue, but it’s right that we do test the machinery. I think the Minister is absolutely right, and this is part of our stepping up to the mark here, to encourage the Minister, in some ways, to say, ‘Do do this, but pick the right one.’ I think he’s right to do it with care, to take this forward with consultation, in order that we do test some of the ideas of what would be the best service to the public good.

I would say in doing that, however, we do need to guard against certain things. One is unintended consequences, and within that, by the way, even though I’m an advocate of environmental taxes and levies, we have to be cautious in the way that we design them, to make sure that there aren’t unintended consequences. So, if, for example, Simon’s idea there, and one that’s been advocated by many environmental groups, were one that came into play in a few months’ time and it was the one that was taken forward to test the machinery, let’s also make sure it doesn’t have any unintended consequences.

Secondly, I would say, let’s make sure—not least in times when we know, as always, people are finding it tough—that there is nothing regressive about any of the proposals we bring forward, and ideally they would be progressive rather than regressive. And not only on individuals but also on businesses, that that cost of complying with any new taxation is not unduly onerous. It will have an impact; you can’t avoid that with a tax, if it impacts on a business, but that it’s not unduly onerous—that it is within what we would consider proportionate.

Finally, of course, as has been laid out not only today, but also in the Bevan Foundation paper, all those aspects of: is it within our devolved competence; does it deal with cross-border issues; does it deal with issues of tax avoidance, and so on? And I would say, in addition to the proposals that are within here, let’s throw some in the mix as some suggestions. Within here it talks about a tourism levy. I have personally some concerns about that and the unintended consequences to do with the reputation of the country and so on. It was looked at some time for the south-west of England. A huge, huge dump of tourists into that area of the country through the summer months and so on, of course you could put a tourism levy, but if it was the only place in the country that had a tourism levy within the UK, well the impact there on reputation and profile of that as a tourism sector is quite interesting, but there are some advantages to it. Innovation—[Interruption.] Sorry.